"Prospects are growing that one of these variations — or a blend of them — will make it into the final Senate bill," The Wall Street journal reports.

Sen. Max Baucus, chairman of the Senate Finance Committee, unveiled a healthcare reform plan in mid-September that did not include a public option.

But the Montana Democrat now states: "The issue is alive, and we're looking at it."

The committee had favored the creation of a network of nonprofit cooperatives instead of the public option. But the Congressional Budget Office concluded that the cooperatives "seem unlikely to establish a significant market presence in many areas of the country."

Supporters of the public option argue that it would encourage lower health insurance premiums in parts of the country dominated by a handful of major insurers, according to The Journal.

Opponents contend that a public plan would give the government too much control over healthcare and would fail to lower costs.

President Barack Obama has voiced support for the public option, but said he is open to other proposals.

The government-run "public option" health insurance plan, once considered a dead issue, is gaining new life in the Senate as several variations come under discussion.One plan being considered by Democrats would allow states to opt out of the public option. Another would...